There's also something to be said about just drawing it out in photoshop.

I like this technique because it's really easy to just grab an airbrush and make pathways and beaches and stuff.. I think it's really the best way to do it, personally. I add another level with the texture in it right above the heightmap so I can match up heightmap pathways with the textures etc.

Then I just bring it into MED (and I always write down the scale/triangle size/etc) so when I want to edit it, I can re-create the HMP in the exact same scale.

Best wishes and happy almost new year,

blender's way:
http://www.blender3d.org/documentation/htmlI/x3495.html

in case you missed it, Bryce 5 is offered free through Sept. 6 at http://www.daz3d.com

I have some tutorials here:

http://www.thebest3d.com/pdp/tutorials

Some are with Bryce 5.

Bryce 5 has a pretty impressive export module to send the terrain to other applications in various formats, with or without colors, textures, bump etc...

And the terrain editor is very powerful and intuitive too.